Birmingham Waterworks Co. v. Brown

• Decision Date: 17 December 1914
• Docket Number: 509
• Citation: 67 So. 613,191 Ala. 457
• Parties: BIRMINGHAM WATERWORKS CO. v. BROWN
• Court: Alabama Supreme Court

67 So. 613

191 Ala. 457

BIRMINGHAM WATERWORKS CO. v. BROWN

No. 509

Supreme Court of Alabama

December 17, 1914

Appeal from Circuit Court, Jefferson County; John C. Pugh, Judge.

Suit by Mary B. Brown against the Birmingham Waterworks Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Sayre J., dissenting.

London & Fitts, of Birmingham, for appellant.

A.G. &amp E.D. Smith, of Birmingham, for appellee.

DE GRAFFENRIED, J.

This is the second appeal in this case. On the first appeal this court upheld, as valid, the contract which is the basis of this suit. Brown v. Birmingham Waterworks Company, 169 Ala. 230, 52 So. 915.

One of the principal questions presented on this appeal is whether this court, on the first appeal, was correct in upholding the contract as valid. For this reason, as well as on account of the importance of this case, the record has been carefully examined in consultation by the full bench, and this opinion is written for the purpose of expressing views of those members of the court who appear as concurring in the opinion.

(1) In the case of Smith v. Birmingham Waterworks Company, 104 Ala. 315, 16 So. 123, this court said:

"The only cases in which water furnished to the 'inhabitants' is not to be charged for by measurement are specified in the first part of section 12, supra, and include only 'dwellings,' and then for 'water-closets' and 'bath tubs' for private families. For these the contract fixes a definite amount for water furnished without regard to measurement. We would not be understood as holding that the designated classes could abuse the privileges by unnecessary extravagance or waste of water; but for the use of water in reasonable quantities sufficient without inconvenient economy for the purposes mentioned, the rates are fixed."

The above opinion was rendered by a court which is regarded by the profession as one of exceptional ability, and since the rendition of that opinion this court has not--except in the opinion rendered on the first appeal in this case--upheld as legal any contract covering rates for water furnished by the water company to residences in the city of Birmingham which did not conform to the ordinance contract made by the water company with the city of Birmingham as construed in the above case. The flat rate provided in said ordinance contract for residences is the maximum rate which can be charged by the water company for water furnished to residences, and while undoubtedly that rate may be lawfully reduced, no reduction can be upheld which is not operative alike upon all who occupy the same class and which is not discriminatory in its character. Birmingham Waterworks Company v. Mayor, etc of Birmingham, 42 So. 10; Birmingham Waterworks Co v. Truss, 135 Ala. 530, 33 So. 657; City of Mobile v. Bienville Water Supply Co., 130 Ala. 384, 30 So. 445.

In the above case of Birmingham Waterworks Company v. Mayor, etc., of Birmingham, 42 So. 10, this court, in holding that the city court of Birmingham, sitting in equity, erred in sustaining the demurrer to paragraph J of the bill of complaint in that case, in reality declared that contracts containing stipulations similar to those contained in the contract now under consideration were illegal. On the former appeal in this case this court, in the effort to sustain the contract now under consideration, said:

"The second proposition is that a condition could arise under the provisions of said contract where a greater charge could be made by defendant than that provided by the maximum rate; that is, that the rate provided for water in excess of 3,333 gallons per month is such that the excess could be large enough to make the rate greater than the maximum rate fixed by the franchise contract. We think it a sufficient answer to this argument to say that the parties contracted with full knowledge of what the franchise contract provided, as well as the law, and what limitations the same imposed, and that a proper construction of the contract between appellant and appellee would be that there was implied the following: 'Provided, that the charge for water shall in no case be greater than the maximum provided by said franchise contract, and, provided further, that it shall not be greater than what is a reasonable charge.' "

The contract which is made the basis of this suit contains plain provisions to pay for all water in excess of 3,333 gallons per month "by the regular schedule of meter rates, which are made a part of this application and agreement." In other words, the contract now under consideration contains, as already stated, provisions substantially identical with those which were described in paragraph J of the bill of complaint considered in Birmingham Waterworks Co. v. Mayor, etc., of Birmingham, supra, and which were in that case, in effect, condemned as illegal. We find nothing in this record indicating that since the rendition of the opinion in Smith v. Birmingham Waterworks Company, supra, the water company has surrendered the right to exact the flat rates which are provided in the ordinance contract for residences in the city of Birmingham, or that any other rate has been legally provided for such residences, and, this being true, these rates are, in so far as the evidence in this record discloses, the only rates which the water company has the right to offer to, or exact of, its customers in the city of Birmingham. Smith v. Birmingham Waterworks Co., supra; Birmingham Waterworks Co. v. Mayor, etc., of Birmingham, supra; Birmingham Waterworks Co. v. Truss, supra; City of Bessemer v. Bessemer City Waterworks, 152 Ala. 391, 44 So. 663; Crosby v. City Council of Montgomery, 108 Ala. 498, 18 So. 723; 3 Dillon on Mun. Corp. (5th Ed.) p. 2236, § 1326. In fact, the contract now under consideration is a contract which this court in Smith v. Waterworks Co., supra, expressly declared the waterworks company had no authority, under its ordinance contract, to make with its customers.

(2) In the opinion on the first appeal this court said that:

The "Birmingham Waterworks Company had a right to contract with an individual to furnish water at a less rate than the maximum rate fixed by said franchise contract, and less than that charged other individuals for similar service so long as the discrimination is enjoyed by those having the favored rate at the expense of the company, and does not impinge upon any rights of other consumers."

This statement was based upon some expressions which are to be found in State ex rel. C.W. Ferguson v. Birmingham Waterworks Company, 164 Ala. 586, 51 So. 354, 27 L.R.A. (N.S.) 674, 137 Am.St.Rep. 69, 20 Ann.Cas. 951. In that case there was a petition for a writ of mandamus, wherein it was claimed that the company had entered into contracts with some consumers similarly situated with the relator, by which it had undertaken to furnish to them water at a rate less than the maximum charges allowed by the ordinance contract. The relator did not claim that he was charged more than the maximum rate, nor that he was charged more than a reasonable price for the water furnished him, but he contended that he was entitled to receive water at the most favorable rate furnished to any others similarly situated. Upon these allegations of the petition for the writ of mandamus this court held that the relator was not entitled to the writ.

In the opinion in that case this court, after declaring that "the business of a company furnishing water to the public is naturally monopolistic and, being given the power of eminent domain to serve the needs of the public more effectually, must serve all consumers with equal facilities without discrimination," indicated that a contract made by the Birmingham Waterworks Company with a favored customer at a rate less than the rate fixed for residences, etc., by the ordinance contract as construed in Smith v. Birmingham Waterworks Company, supra, and at rate less than that charged its other customers, might, under certain circumstances, be upheld.

This case of State ex rel. Ferguson v. Waterworks Company, supra, is reported in 164 Ala. 586, 51 So. 354, 27 L.R.A. (N.S.) 674, 137 Am.St.Rep. 69, 20 Ann.Cas. 951, and in a note to that case (27 L.R.A. [ N.S.] page 674) we find the following:

"It may be stated as a general proposition that a corporation or municipality authorized to supply water or light to the inhabitants of a municipality may not discriminate as to the rates charged, at least among those of the same class."

Cited, as sustaining the above proposition, we find in this note the following cases: Danville v. Danville Water Co., 180 Ill. 235, 54 N.E. 224; State ex rel. Latshaw v. Water & Light Com'n, 105 Minn. 472, 117 N.W. 827, 127 Am.St.Rep. 581; Griffin v. Goldsboro Water Co., 122 N.C. 206, 30 S.E. 319, 41 L.R.A. 240; Armour Packing Co. v. Edison Electric Illuminating Co., 115 A.D. 51, 100 N.Y.Supp. 605; Cincinnati, H. & D.R.R. Co. v. Bowling Green, 57 Ohio St. 336, 49 N.E. 121, 41 L.R.A. 422; Mobile v. Bienville Water Supply Co., 130 Ala. 379, 30 So. 445; Snell v. Clinton Electric Light, H. & P. Co., 196 Ill. 626, 63 N.E. 1082, 58 L.R.A. 284, 89 Am.St.Rep. 341.

When the city of Birmingham made its contract with the waterworks company it intended--and the contract so provides--that there should not be any discrimination made by the waterworks company in the matter of supplying water to the inhabitants of the city of the same class. The maximum rates provided for residences are specific and certain. Stability and equality of rates on the part of a public service corporation are more important than reduced rates. It was the fact that without a contract fixing the rates for water there would probably be instability and inequality of rates, and...